Umbrella company PAYE changes from 6 April 2026 | Joint and Several Liability (JSL) risk for agencies
What are the umbrella company legislation changes 2026?
The government has introduced Joint and Several Liability (JSL) for PAYE and National Insurance in umbrella company arrangements. From 6 April 2026, if an umbrella company fails to pay the tax it owes to HMRC, that liability can be recovered from whoever sits above them in the supply chain: the recruitment agency, or your business as the end client if no agency sits in between.
This applies to new and existing arrangements. If you currently use contractors who work through umbrella companies, your business may already be in scope.
What you need to know
Joint and several liability
If an umbrella company fails to pay PAYE or National Insurance to HMRC, liability flows up the chain to the agency or end client. HMRC will pursue you directly.
No reasonable care defence
You remain liable for unpaid PAYE and NICs regardless of the due diligence you have conducted. Taking reasonable steps is not enough.
End client exposure
Where there is no agency in the supply chain and you contract directly with an umbrella company, you carry the full liability as end client.
March is the real start date
Work performed in March is paid in April, bringing it under the new rules. The practical deadline is earlier than most businesses have planned for.
Due diligence is not enough
Vetting umbrella companies is necessary, but it will not protect you from liability if a non-compliant provider fails to pay.
700,000 workers affected
Approximately 700,000 individuals work through umbrella companies in the UK. Around 30,000 agencies are impacted by the new rules.
is Joint and Several Liability (JSA) applicable to me?
Your liability depends on how your supply chain is structured. Most businesses fall into one of the following positions:
➔ You engage an umbrella directly. No agency in the chain means you carry full liability as the end client.
➔ You use an agency that uses an umbrella. The agency is primarily liable, but you carry secondary risk if they fail to pay.
➔ TRIA sits in the chain. We take on the contracts between you and the umbrella. The liability sits with us, not you.
➔ Agency employs workers on direct PAYE. No umbrella in the chain means JSL does not apply.
Download our client briefing
Covering the key changes, your liability position, and how to reduce your exposure ahead of April.